This week's elections in Italy will not only determine the future of Italy - it will also be key event for Europe and the eurozone. The future of the eurozone depends on whether its third-largest economy can keep its fiscal house in order and resume growth after a decade of stagnation. As expected, Italy’s electoral race has been dominated by internal affairs: jobs, unemployment and pension reforms.
However, the austerity measures pushed through by the Monti government have been heavily criticised - and most candidates tried to reassure citizen that taxes would not have to be increased anymore. At the same time, the outcome of the elections will be a signal for Europe as to whether Monti's technocratic government will have any lasting legacy. But the outcome is far from certain which is largely due to three factors: the return of Berlusconi, a split in the centre-left and a dysfunctional electoral system.
One of the most surprising events has been the return of Silvio Berlusconi. He is an unlikely candidate considering his involvement in separate trials for tax fraud and other offences. Furthermore, his party seemed fragmented both internally and had largely lost appeal amongst voters. Although he is still unlikely to win the election, his campaign has been incredibly successful. Not only did he promise to abolish a very unpopular property tax, he also announced that last year's tax would be refunded in cash. As expected Berlusconi attacked current Prime Minister Mario Monti for his austerity policies and argued that it deepened the recession and created record unemployment. According to Berlusconi, Italy has turned into a “German colony” under Monti’s technocratic government.
Monti and Bersani: Natural allies?
Pier Luigi Bersani won the centre-left primaries in November, with more than 60 per cent of the vote. Currently he is the leader of the Democratic Party, Italy’s largest party - and he has been leading the polls ever since the election was announced. According to the latest polls it is projected that Bersani could win with 34-35% of the vote, while Berlusconi could reach 30%. This means that, in order to reach the majority necessary to govern (42,5%) Bersani would need to find an ally – and his natural ally would be Mario Monti. However, the more left wing elements of Bersani’s coalition, such as Sinistra Ecologia e Libertà (SEL) and the trade unions openly oppose this alliance. Monti on the other hand has also expressed his refusal to ally with the leftist groups of Bersani’s coalition.
The electoral system: An Italian anomaly
The Italian political system can also have a massive impact on the outcome of elections as it can change majorities. The two chambers of the Italian parliament (Chamber of Deputies and Senate) have the same rights and powers but are independent from each other. Any government has to secure a majority in both chambers which can be difficult thanks to flawed election system. In Italy the same share of votes can produce different majorities in the Chamber of Deputies and in the Senate - clearly a recipe for instability.
The election outcome can only be understood by looking at the underlying election system. Seats for the Chamber of Deputies are won on the basis of national majorities - but seats for the Senate are allocated following a regional formula. The party/coalition that wins the biggest share of seats in the Chamber of Deputies is automatically awarded 55% of the 630 seats of the chamber, with the remaining seats allocated proportionally to parties passing the required threshold (4% for parties and 10% for coalitions).
The party that wins the biggest share of votes in a region is automatically given 55% of the region’s seats in the Senate. Therefore more populous regions as Latium, Lombardy, Sicily and Veneto are likely to determine the outcome of the election and the composition of the future government. Lombardy for example is generally described as the “Italian Ohio”, since it has a total of 49 Senate seats, 27 of which are allocated to the winner. Traditionally, the centre-left has been weak in Lombardy while it is one of Berlusconi's strongholds. But it looks as if Bersani could benefit from the collapse of the regional government and a corruption scandal. However, Lombardy will be the region to watch - recent polls suggest a very close race.
And last but not least, not all votes count the same in Italy: Only citizens who are older than 25 years are allowed to vote for the Senate, while the younger generation is only allowed to vote for the Chamber of Deputies.
Predicting the outcome of this general election is almost impossible: the political scene is highly fragmented and in a state of flux and Italy's flawed electoral system will produce further political instability.
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